Ride-hailing apps such as Uber and Lyft have been so disruptive to New York City's taxi industry, they are causing lenders to fail.
Three New York-based credit unions that specialized in loaning money against taxi cab medallions, the hard-to-get licenses that allow the city's traditional cab fleet to operate, have been placed into conservatorship as the value of those medallions has plummeted.
Just three years ago, cab owners and investors were paying as much as $1.3 million for a medallion. Now they are worth less than half that, and some medallion owners owe more on their loans than the medallions are worth.
"You've got borrowers who are under water. This is just like the subprime loan crisis," said Keith Leggett, a credit union analyst and former senior economist at the American Bankers Association.
LOMTO Federal Credit Union, which was founded by taxi drivers in 1936 for mutual assistance, was placed into conservatorship by the National Credit Union Administration on June 26 "because of unsafe and unsound practices."
New York City has the nation's largest taxi industry, with more than 13,000 medallions.
Marcelino Hervias bought his medallion in 1990 for about $120,000 and thought its value would hit $2 million by the time he was ready to retire.
Instead, the 58-year-old said he owes $541,000 and is driving 12 to 16 hours a day to make ends meet.